Street to Ford: Keep Talking

Ford shares hit a three-week high today on hopes that a meeting between Ford CEO Alan Mulally and Toyota Chairman Fujio Cho "would eventually lead to cost-savings."

Analysts "discounted the prospect of a near-term alliance," the Washington Post reported. Ford declined comment. Toyota, while confirming the meeting, said the high-level talks were "just a get-acquainted" session and that "no deal was on the agenda."

The Post continued:

But Ford shares rose on the prospect that the company, which is struggling to turn around its loss-making U.S. operations, might clinch a cost-saving partnership with Toyota in areas such as technology development or parts purchasing.

"At this point, Ford needs to be focused on North America," said Mark Oline, corporate finance analyst with Fitch Ratings. "Longer term, across the industry, we see the prospect for alliances of different forms taking shape."

In general, analysts are liking Mulally, who has front-burnered product development, streamlined management, and boosted liquidity to the tune of $25 billion in his first months as Ford's top dog. But whatever optimism analysts are feeling about the Ford-Toyota talks is tempered by uncertainty as to what Toyota would gain from a partnership.